Banks were earlier required to get a prior approval of the RBI for such investments which are subject to prudential limits.
The RBI said the investment flexibility will be limited to banks that have capital adequacy ratio (CRAR) of 10 per cent or more and also made net profit in the previous fiscal.
"To give more operational freedom and flexibility in decision making, it is advised that banks which have CRAR of 10 per cent or more and have also made net profit as of March 31 of the previous year need not approach the RBI for prior approval for equity investments (in financial services companies)...," it said.
While making such investments banks will have to adhere to other conditions, which include limit on holding in investee company.
Earlier, banks were required to get a prior approval of the RBI for such investments which are subject to prudential limits.
Sensex closes at highest level in over two weeks
Top Indian firms queue up to restructure loans
Why Modi govt's FDI claims are puzzling
6 home loan fees you didn't know!
Rupee closes 3 paise lower at 66.36 against USD